First, let's check the calculations. If you were covered by plan for all 12 months, your family limit is $7750 plus a personal catch-up of $1000. Because your spouse was "covered" by a family plan for all 12 months (even though she was not the "owner") her limit is $7750. But your overall family limit is also $7750.
So you are $121 over.
Either one of you could do a withdrawal of excess contribution, it doesn't have to be from the spouse's account.
If you withdraw amounts that were originally contributed by the employer, they still come to you. They don't go back to the employer. There is an IRS ruling on this that I can't find, but I'm pretty sure employer's can't take back the money in most cases, even if they wanted to, and there is no way in your wife's situation that they would even find out.
Turbotax should detect the excess and add it to your taxable income for you. If you had made after-tax contributions to your HSA (in addition to the employer contributions) and you chose to remove those contributions instead, it would reduce your tax deductible contribution (which would have the same effect as adding the spouse's excess to their taxable income.)
